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Thursday, 21 January 2010 00:00

Changes in Employment Law

2009 Wisconsin Act 20, effective July 1, 2009, expands Wisconsin Fair Employment Law to make available compensatory and punitive damages for employment discrimination.  This is a significant change to the law, and presents new opportunities and new pitfalls for both employees and employers.  These damages are now available along with the other remedies of back pay, reinstatement, and attorneys’ fees in employment cases, and bring Wisconsin law more closely in alignment with Title VII of the federal Civil Rights Act.

Compensatory damages typically go beyond traditional remedies and would encompass “front pay,” e.g., wages or salary that would have been paid in the future but for the adverse employment action.  Punitive damages are special damages available where an employer has acted in a particularly unlawful manner or in bad faith, and are used to “punish” the employer into behaving better in the future.

Employee Considerations

Compensatory and punitive damages may be available to the aggrieved employee, but only if two things occur: (1) the employee must first be successful in an administrative proceeding with the Equal Rights Division and obtain a “probable cause” determination, and (2) must then commence an action in circuit court to obtain the additional damages.  The new law also provides for a jury trial on these issues.  Employees are required to exhaust their administrative remedies first before they can bring their case to the circuit court.

For employees who may have a cause of action, the new changes to the Wisconsin law allow for expanded remedies, and the opportunity to recover a larger amount from an employer who has violated the law.  Employers’ liability for compensatory and punitive damages is capped, however, with the maximum amount that can be recovered set at $300,000.  It becomes even more important now if you suspect that you may 

be a victim of employment discrimination, you should hire an attorney as early as you can in the process.  This is necessary to insure that all possible bases of discrimination are reviewed (including any potential retaliation claims), and that the charges filed in the administrative proceeding are handled correctly.  Our attorneys are very experienced with the filing of these charges and have represented numerous employees in successful outcomes.

Employer Considerations

Dempsey Law attorneys have long advised business clients about terminations and employment decisions and have brought significant value to employers in these cases.  For employers, the stakes of losing have gone up, with new potential for additional exposure.  Our lawyers believe in a “proactive” approach, and can ably assist the employer early on in the process to reduce or eliminate any liability. 

An employment lawyer should be involved as early as possible in the employment decision process with the employer.  This is an opportunity early on to discuss the planned action, assess the facts and the risks, and determine the appropriate strategy.  Yes, it may cost a little money up front for the employer, but it can pay huge dividends down the road if the discrimination charges, circuit court case, and alleged damages can be eliminated or substantially reduced.

Another proactive approach we recommend for employers is to conduct an employment law “audit.”  This exercise, which could involve five to ten hours of an employment attorney’s time, results in a thorough review of the employer’s employment practices and documentation, a report, and recommendations, if called for, on how to better protect the employer’s interests.

Significant Deadlines

For both employees and employers, there are some significant dates and time periods to keep in mind during an employment case.  After a hearing examiner finds, or LIRC affirms a 

finding of probable cause, the employee must be notified in writing that he or she may bring a civil action in circuit court to recover compensatory or punitive damages.  Under the new Act, the time limit for bringing a civil action is 60 days from the time of the hearing examiner’s final decision is mailed to the employee, or if the examiner’s decision is reviewed by LIRC, 60 days after LIRC’s final decision is mailed to the employee.

Conclusion

As of July 1, 2009 the potential rewards for aggrieved employees and the potential risks for employers facing charges have gone up in employment discrimination cases.  Compensatory and punitive damages are now available, and the aggrieved employee is now entitled to a jury trial in circuit court on these damages, if probable cause is found.  This will require that both employees and employers understand their rights and take the appropriate steps to protect themselves and their economic interests.

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